In business cash flow is king. I know what your thinking, sounds obvious right, but you would be surprised how many Australian Food Distribution businesses are currently in a cashflow hole.
Yes, your business may be distributing the best products, have a strong recurring customer base and offer the best price but, if you don’t have enough money to get you through the time you supply a product to the time of payment, your business could be in some serious trouble.
So, what are the 5 signs your business could have a cashflow issue?
Before looking at the signs you first need to understand what cashflow is.
What is cash flow?
Cash flow is the amount of money being transferred in and out of your business as you trade. If you have more cashflow coming into your business, then what is going out your business will be cashflow positive. If your cashflow doesn’t cover operating expenses, you will have a negative cashflow.
Know What Your Cashflow Situation Is – Signs of Cashflow Problems
In every business, knowing where your money stands is critical. Many Australian small businesses face a cash flow problem without realising it. It often begins with late payments or rising expenses and can quickly escalate into serious cash flow difficulties.
Effective cash flow management means tracking every dollar coming in and going out. Watch for inconsistent income, as fluctuating revenue and fixed expenses create pressure on working capital. Increasing debt is another red flag. Relying on short-term loans or credit cards indicates negative cashflow.
Slow invoice processing also worsens australian small businesses cash flow problem by disrupting payment cycles. When customers delay payments, your operations slow down too.The best solution is to stay proactive. Automate your invoicing, use real-time data, and monitor cash movement closely. Identifying cashflow issues in business early helps prevent long-term damage and keeps your small business financially healthy.
Warning Signs Your Business Could Have a Cashflow Issue
Running a business without strong cash flow management is like driving without a fuel gauge. You might move forward for a while, but eventually, you will stop. Many small business cash flow problems begin with subtle hints that often go unnoticed.
Here are the most common cash flow issues small business owners should watch for:
1. Declining Profit Margins
When operating costs rise faster than your revenue, profit margins shrink. If your pricing strategy does not adjust accordingly, your business will struggle to stay profitable.
2. Increasing Debtor Days
If customers are taking longer to pay, your business is effectively funding theirs. Extended debtor days create cash flow issues for small businesses, especially when suppliers demand payment upfront.
3. Frequent Use of Overdrafts or Loans
Relying on overdrafts to manage everyday expenses is another indicator of business cash flow problems. While finance options can help in emergencies, consistent reliance on them points to deeper operational inefficiencies.
4. Delayed Supplier Payments
When you delay payments to suppliers, it may seem like a quick fix. However, this damages relationships and limits your ability to negotiate better terms in the future.
5. Stalled Growth
Healthy businesses grow steadily. If your growth has stopped or reversed, it may indicate underlying cashflow issues that need immediate attention.
Final word,
The food distribution industry is facing many challenges. It’s so important you frequently assess your cashflow situation. Look out for the warning signs. Fortunately for distributors there are ways you can improve your cashflow.
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About EasyVend,
For food vendors and distributors, EasyVend supports and automates every part of your business, freeing you up to grow your sales unlike other ERP systems that are designed more for wholesale suppliers than for distribution businesses like yours.
EasyVend includes all your everyday needs like inventory management, online ordering, invoicing, receipting, delivery management, payment gateway, customer reminders, Xero integration and so much more.
Want to learn more about EasyVend? Call us today on 1300 473 744 or click the button below to get a no-obligation Trial EasyVend of EasyVend.
FAQs
What is a B2B ordering system?
A B2B ordering system is a digital platform that enables businesses to buy and sell products or services directly with other businesses online. It automates the ordering, invoicing, and payment processes and makes them faster and more accurate. For example, food and beverage distributors use systems like EasyVend to streamline their entire order-to-payment workflow and eliminate manual paperwork.
Which platform is the best platform for B2B?
The best B2B platform depends on your industry and needs. For Australian food and beverage suppliers, EasyVend is one of the top solutions. It offers an all-in-one dashboard for managing orders, stock, deliveries, invoicing, and payments. It is built specifically for distributors, not generic wholesalers, ensuring every feature supports real business workflows.
What is a B2B sales platform?A B2B sales platform helps businesses manage sales transactions between companies. It simplifies the process of quoting, ordering, and invoicing by bringing everything online.